Multifamily Housing Building Permits Soar 75% Over `84 In Chicago Area

August 04, 1985

A dramatic increase in the number of multifamily housing permits issued in the Chicago area in the first six months of 1985 is pushing housing activity to its highest level since 1978, according to the latest data from Bell Federal Savings & Loan`s Survey of Building.

So far in 1985, housing permit activity is running nearly 30 percent ahead of 1984 levels. Single-family permits are about 6 percent above last year, but multifamily permits are being issued at almost 75 percent higher levels than in 1984.

Through June, municipalities in the seven-county metropolitan area reported issuing permits for 5,782 multifamily units, up from 3,389 a year ago. Single-family permits were running slightly ahead of year ago levels with 7,301 issued so far this year compared to 6,917 a year ago.

Permits for 13,083 housing units have been issued so far this year, compared to 10,306 in the first six months of 1984. If the pace continues, 1985 housing starts could top 27,500 units compared to 21,818 in all of 1984. Not since 1978, when permits were issued for 46,066 units, has activity been that strong.

``A combination of factors has brought this upswing in housing,`` said Edmond Shanahan, president of Bell Federal. ``Obviously, the availability of mortgage money is one of them, as well as lower interest rates in the first half of 1985 compared to 1984.``

``In addition to the lower rates, multifamily units have probably increased because of the concern over tax legislation proposals that would adversely affect multifamily construction in future years,`` he said.

Building permits reported for June this year rose for the fourth consecutive month over 1984 levels, the Bell survey showed. Permits for single-family houses rose to 1,817 from 1,482 while multifamily permits soared to 1,524 from 1,033.

Because housing permit volume is normally higher in the second half of the year, Shanahan predicted 1985 would easily be the best year for Chicago area housing in six years. In 1979 permits were issued for 27,171 units, a number Shanahan believes will be topped in 1985.

``I`ve always been more optimistic about the Chicago housing outlook than economists have been for the nation as a whole,`` said James Nathenson, president of the Home Builders Association of Greater Chicago. ``It`s just a gut feeling I have that the Chicago area is finally coming back strong economically.``

While Nathenson said he doubted housing activity could sustain a pace 30 percent higher than 1984 through the rest of this year, he did predict interest rates will stay down and allow more buyers into the market.

Despite an unsuccessful attempt to place a moratorium on construction, west suburban Naperville continued to put tremendous distance between itself and every other suburb in the housing leader derby.

Through the first six months of 1985, Naperville has issued permits for 970 single-family homes and 1,434 multifamily units. The 2,404 total permits in six months has already surpassed Naperville`s total housing permit activity for 1984 when the city issued 2,349 permits.

Naperville is currently building at five times the pace of any other suburb. If the second through ninth suburban housing leaders had their total permits combined, they would still not equal Naperville.

But there were some other bright spots in the suburbs. Northwest suburban Schaumburg reported issuing 146 single-family permits in June after issuing just 122 for the first five months of the year. Also in the northwest area, Prospect Heights issued 81 single-family permits in June, when a year ago it issued just 4. Arlington Heights continued strong in the single-family permit field with 47 issued in June.

Du Page County communities racked up some big multifamily projects in June. Lombard issued permits for 156 units of multifamily housing, Elmhurst 80 units and Glendale Heights 48. Lombard, with just 13 single-family permits recorded, has issued permits for 504 units of multifamily housing so far in 1985 to catapult the village into second place among suburban housing leaders. The value of all building permits reported in the seven-county area for the first six months of 1985 totaled $1.98 billion. In 1984 total permit activity totaled $3.6 billion.